Cryptocurrency brokers and investment advisers offering or providing cryptocurrency advice will come under the control of the United States securities watchdog this year.
a february 7 statement from the Securities and Exchange Commission (SEC) Examination Division outlined its priorities for 2023, suggesting that cryptocurrency brokers and advisors will need to exercise extreme caution when offering, selling, or making recommendations regarding digital assets .
He said SEC-registered brokers and advisers will be closely watched to see if they followed their “respective standards of care” when making recommendations, referrals and providing investment advice.
Today we are announcing the Examination Division’s priorities for 2023. The Division annually publishes its examination priorities to provide insight into its risk-based approach.
For more:
— US Securities and Exchange Commission (@SECGov) February 7, 2023
The SEC will also examine whether these entities “routinely” review and update their procedures to ensure they comply with “compliance, disclosure, and risk management practices.”
This announcement was similar to the SEC’s priorities released in 2022, however it appears that this year the regulator is placing more emphasis on broker standards of care and practices, rather than considering the unique risks posed by “technologies.” emerging finance”. highlighted in 2022.
The latest statement comes nearly two weeks after a report claimed that the SEC has been investigating registered investment advisers who may be offering custody of digital assets to their clients without proper qualifications.
Related: SEC Leaked Personal Information Of Crypto Miners During Investigation: Report
The SEC investigation has reportedly been ongoing for several months, but is now at the top of the priority list after the collapse of crypto exchange FTX, according to a Reuters report.
By law, investment advisory firms must be qualified to offer custodial services to clients and meet the custodial guarantees set forth in the Investment Advisers Act of 1940.
